Tuesday, January 6, 2009

Models of Employment

I found there are at least two models:

1. Direct Profit Generating

With this model, the employee generates profit for the employer directly. In that case, that means the employer is earning money from the employment relationship, and the salary for the employee is only part of the profit generated.

A simple example will be the dog of the hunter, or a fish-catching bird of the fisherman. In both case, the real profit generating party is the employee.

Of course, sometimes the situation can be a little bit more complex. For example, when the employee cannot generate that much profit by himself alone. The profit generated is a result of economy of scale, or it can only be realized with the whole team. However, the sum of the profit generated by the team should still be bigger than the sum of their salaries added together.

2. Indirect Profit Generating

With this model, the employee does not generate any direct profit. In that case, the employee only helps the employer to do some of their work, and these work were not generating profit but if the employer has to do those work by himself, the employer will not be able to use his time to generate a certain amount of profit. That amount should usually be bigger than that of the salary of the employee.

A simple example will be housemaid, drivers or any other supportive workers.

So?

So if you are in case one, you might be able to get yourself a better position. You should find some places where you can actually do more for yourself instead of for your boss. If you are in case two, I guess you should train yourself up so that you might be able to switch to a better position sooner or later.